You're out to dinner with four friends and no one remembers to ask for separate checks. Some of you order appetizers, others have a few extra drinks. Some have cash, some have credit cards. Then the bill arrives. How are you going to split it?

Barclays bank in the U.K. pictured this scenario and realized the problem couldn't be solved with its current online banking site or mobile app.

"Wouldn't it be nice to text that person and send them the money you owed them?" asks Shaun Terry, head of mobile banking at Barclays. He and his team figured there had to be a way to make a payment to someone through a phone number in a smartphone address book.

Bank officials knew that most customers would have their phones with them at all times, with easy access to their contact phone lists. "The key thing we saw was simplicity and availability," Terry says. "If I wanted to go and make a payment through online banking, I would have to login and go through security."

Barclays conducted focus groups with a wide range of customers, working through 25 possible versions of the mobile app and relying on an external agency to help with the user experience design. Simplicity was the main feature that focus groups emphasized. "Users are not forgiving if you have a poorly designed app," Terry says.

The final result was its Pingit person-to-person mobile app, which allows customers to send and receive payments via text messages between mobile phone numbers. The app received a 2012 CIO 100 award for its innovative approach and business value.

After 90 days of development, Barclays rolled out Pingit to its U.K. customers last February. Bank officials declined to discuss the costs but said full payback on the investment took seven-12 months.

How Pingit Works and Does It Matter?

To set up the service, customers download the Pingit app from the app store on an iPhone, BlackBerry or Android device and then register their Barclays account and phone number. To send a payment, they enter the recipients' phone number and the amount of money they want to send. The recipient then gets a text message saying funds have been deposited into their account.

Barclays has had 1.2 million downloads and half a million customers who have registered to use Pingit. More than 50 million pounds have gone through the system so far, Terry says. The bank has also used Pingit as a way to entice non-Barclays customers into switching over to Barclays."Quite a lot of people said on Twitter that they joined Barclays because of Pingit," Terry notes. Of the registered customers on Pingit, 60,000 are non-Barclays customers.

Texting payment services like this one are still rare, so it's unclear what kind of impact such innovations will have, says Marc DeCastro, research director of consumer banking at International Data Corp. "There are already enough alternatives in place today," he says. "It's a technology looking for a need. We might be ready for it eventually."

Banks have been using text messaging for banking functions for a few years now, though not for person-to-person money transfers. Wells Fargo, for example, allows customers to check account balances through text messages.

Terry says Barclays didn't just want to follow what other banks were doing. "We wanted to be at the front instead of joining someone else's queue," he explains. "It put us out there because we weren't racing against anyone else."

After putting out the first version of Pingit, Barclays noticed to its surprise that people younger than 18 were requesting the service via blogs, social media and app review websites. "We did a concerted effort and brought the age limit to 16 since so many younger people wanted to use the service," Terry says. Two weeks later, the mobile team rolled out another version so teens 16 and older could sign up.

IDC's DeCastro points out that not everyone has his or her own bank account but can still use prepaid debit cards that are linked to a bank account. "There are lots of practical applications for it if you don't have a checking account," he noted. "There's definitely a market for that."

Yet the analyst cautions that until there is standardization among banks and service providers, there likely won't be widespread adoption of the technology. "There are so many vehicles to move money around. With the lack of a standard accepted format in the industry, it creates all these starts and stops."

In the meantime, Barclays continues to add features to the app such as payments via QR codes in order to keep the service up to date. Every month, the bank releases a new version to the app stores for Apple, RIM and Android and they are working on further simplifying the registration process and social media integrations.

Lauren Brousell is a staff writer for CIO Magazine. Follow her at @LBrousell. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.